Question
Discus Inc., an electronics retailer, commenced operations on January 1, 2020. The unadjusted trial balance for Discus as of March 31, 2020, follows along with
Discus Inc., an electronics retailer, commenced operations on January 1, 2020. The unadjusted trial balance for Discus as of March 31, 2020, follows along with additional supporting information. Acct. No. Accounts Debit Credit 100 Cash $ 83,200 104 Accounts receivable 78,400 105 Supplies 7,200 106 Inventory 120,000 108 Prepaid insurance 4,800 155 Building 240,000 160 Equipment 128,000 170 A/DBuilding 171 A/DEquipment 202 Accounts payable $72,000 203 Utilities payable 208 Deferred service revenue 2,880 209 Interest payable 240 Note payable 200,000 302 Common stock 176,000 300 Retained earnings 141,120 310 Dividends 2,400 400 Sales 560,000 403 Service Revenue 510 Cost of goods sold 320,000 515 Operating expense 24,000 516 Supplies expense 517 Insurance expense 518 Depreciation expense 519 Utilities expense 520 Salaries expense 144,000 530 Interest expense Totals $ 1,152,000 $ 1,152,000 Additional information: Examination of supplies indicates that $4,800 of supplies are still available on March 31, 2020. One year of insurance coverage was purchased on January 1, 2020, for $4,800 cash. The building and equipment (purchased on January 1, 2020) will be depreciated evenly over the useful lives of 30 years and 8 years, respectively. $1,280 of the $2,880 in Deferred Service Revenue relates to service obligations to be performed after March 31, 2020. Annual interest on the note payable is 8%. Interest is due in one year upon the maturity of the note. The note was issued on January 1, 2020. Utilities for March 2020 of $1,280 have been incurred but not yet paid. At the end of March, the company provided a new service to customers for in-home assessments. The company will bill customers $960 in April for services performed in March. Additional general ledger accounts, currently with a zero balance, are listed. Required: a. Prepare all necessary adjusting entries as of March 31 for the three-month period ended March 31, 2020. b. Prepare an adjusted trial balance on March 31, 2020. c. Compute net income for the three months ended March 31, 2020. d. Compute Total Assets as of March 31, 2020. e. Compute Total Stockholders Equity as of March 31, 2020.
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